Special Bulletin: July 24, 2019

The summers heat is not the only thing that’s hot right now! Continued record closing highs on the S&P500 and the Nasdaq, and a 1.6% surge in the heretofore struggling Russell 2000 small-cap index turned up the heat on the bear camp today. Our Current Market Outlook remains “Market in an Uptrend” with a “green” light.

We are calling this bull move “The Timex Rally”. Why? Because it takes a licking and keeps on ticking. Perhaps we are showing our age with that slogan, but the phrase fits. The demand for equities has continued in spite of all that the world has thrown at the market, fake news or otherwise.

It is important to note, however, a few technical indicators have begun to show subtle weakness developing over the past 3 weeks. The Distribution Day count is rising, as is the number of daily NYSE new lows. Regarding our “Core 4” indicators, currently one is RED, one is YELLOW, the last two are GREEN.

We believe a few things need to happen for this rally to continue; the Fed needs to cut (more below), the banks and semis should lead (1 out of 2 so far), small-caps and transportation stocks have to get into gear (starting their engines?), and China must play nice (that was easy. LOL!).

Wise investors will pay close attention to the Fed’s announcement next week on interest rates. The expectation is for a 1/4% cut, the hope is for a 1/2% cut, while the fear is of a frozen Fed that sits tight instead of cutting. That latter outcome would likely cause a violent negative reaction in US stocks and make the President look right again.

Our analysis of the “math of the market” is based on time-tested technical internals and our disciplined system tracks the “footprints of money”. Our job is to interpret the markets daily internals and stay aligned with the current major trend. The mathematical internal indicators of our objective 3-stage sell-signal process focus on the heartbeat of the market and eliminate the media hype.

Have a Triumphant day! ®